The Irrelevance of Major League Baseball's Antitrust Exemption: A Historical Review

Mitchell J. Nathanson, Villanova

Abstract

This article examines Major League Baseball’s (MLB) antitrust exemption from a practical, historical perspective and concludes that it is largely irrelevant to the actual (as opposed to theoretical) workings of the business of baseball. This article focuses first on the exemption’s supposed protection of baseball’s “reserve clause” and finds that it was irrelevant to its creation in 1879 as well as its demise in 1975. Despite the exemption, the reserve clause has always been subject to challenge under contract law and it was a simple argument based on contract law principles that led to its eventual dismantling. This article then focuses on the exemption’s purported ability to allow team owners to prevent franchise relocation and unwanted expansion (unlike their brethren in the National Football League (NFL)) and concludes that the exemption is merely a mirage: while it appears to exist from afar, up close it disappears. As a result, MLB owners have historically acted no differently than their counterparts in the NFL and in accordance with the principles of the Sherman Act out of fear that if they did not, Congress would step in and formally remove the exemption. Thus, in an ironic effort to prevent the Sherman Act from applying to it, MLB has voluntarily abided by it.

Suggested Citation

Mitchell J. Nathanson. "The Irrelevance of Major League Baseball's Antitrust Exemption: A Historical Review" Rutgers Law Review 58.1 (2005): 1-43.
Available at: http://works.bepress.com/mitchell_nathanson/3